How to Boot Windows 7 in a USB Drive (Windows PE LiveCD or LiveUSB)

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Windows Preinstallation Environment (also known as Windows PE and WinPE) is a lightweight version of Windows used for the deployment of PCs, workstations, and servers, or troubleshooting an operating system while it is offline. It is intended to replace MS-DOS boot disks and can be booted via USB flash drive, PXE, iPXE,[1] CD-ROM, or hard disk. Traditionally used by large corporations and OEMs (to preinstall Windows client operating systems on PCs during manufacturing), it is now widely available free of charge via the Windows Automated Installation Kit (WAIK).

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WinPE was originally intended to be used only as a pre-installation platform for deploying Microsoft Windows operating systems, specifically to replace DOS in this respect. WinPE has the following uses:

Deployment of workstations and servers in large corporations as well as pre-installation by system builders of workstations and servers to be sold to end users.Recovery platform to run 32-bit or 64-bit recovery tools such as Winternals ERD Commander or the Windows Recovery Environment (Windows RE).Platform for running third-party 32-bit or 64-bit disk cloning utilities. The package can be used for developer testing or as a recovery CD/DVD for system administrators. Many customized WinPE boot CDs packaged with third-party applications for different uses are now available from volunteers via the Internet.

The package can also be used as the base of a forensics investigation to either capture a disk image or run analysis tools without mounting any available disks and thus changing state.[2]

Version 2.0 introduced a number of improvements[3] and extended the availability of WinPE to all customers, not just corporate enterprise customers by downloading and installing Microsoft's Windows Automated Installation Kit (WAIK).

It was originally designed and built by a small team of engineers in Microsoft's Windows Deployment team, including Vijay Jayaseelan, Ryan Burkhardt, and Richard Bond.[4]

Step 1: Files That You Need to Make Windows 7 Able to Run Without Installing

First, Read this to know What is Windows PE

"Windows Preinstallation Environment (also known as Windows PE and WinPE) is a lightweight version of Windows used for the deployment of PCs, workstations, and servers, or troubleshooting an operating system while it is offline. It is intended to replace MS-DOS boot disks and can be booted via USB flash drive, PXE, iPXE, CD-ROM, or hard disk. Traditionally used by large corporations and OEMs (to preinstall Windows client operating systems on PCs during manufacturing), it is now widely available free of charge via the Windows Automated Installation Kit (WAIK)." (from Wikipedia)